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Private equity player Carlyle Group on Friday entered into a definitive agreement with State Bank of India to acquire 26 per cent stake in SBI Card, a joint venture between the country's largest bank and American major GE Capital which has exited financial services globally.
SBI Card is operated through two joint-ventures--SBI Cards & Payment Services (SBICPSL), which focuses on the marketing and distribution of SBI Cards, and GE Capital Business Process Management Services (GECBPMSL) handling the technology and processing needs.
In SBICPSL, SBI owns 60 per cent and the rest is with GE Capital, while in GECBPMSL, SBI owns 40 per cent and the balance is with GE Capital.
After GE announced its plans to exit, SBI board had decided to increase its stake in the two JVs to 74 per cent.
"Following the transaction, SBI and Carlyle will own 74 per cent and 26 per cent respectively in each of the two entities," SBI said in a statement here without disclosing the financial details of the deal.
The deal is expected to be closed by December, subject to regulatory approvals, the bank said.
"We welcome Carlyle, and look forward to the new partnership capitalising on the significant opportunities that are opening up in the domestic market," SBI managing director (associates and subsidiaries) Dinesh Kumar Khara said.
Two years ago, GE had announced it would be exiting the financial business globally as part of its reorganisation of its businesses.
Carlyle s equity for this transaction will come from an affiliated entity of Carlyle Asia Partners IV, Carlyle s fourth Asia buyout fund focusing on control and significant minority investments in well established companies across the Asia ex-Japan region.